This is no April Fool’s joke

Posted Date:
7/25/2014

By Jonathan Trivers

On April 1, 2014 (April Fools’ Day) Lumber Liquidators announced on its website that for “today” only they had some great buys on carpet. Carpet? Lumber Liquidators? When you clicked to see what carpet was on sale there was a very sleazy looking salesperson saying, “April Fools!” Basically they made fun of ordinary carpet and extolled the beauty and value of wood from Lumber Liquidators.

As it was making fun of something other than wood, Lumber Liquidators finished its preparation to test ceramic tile in three of its stores. This is no April Fool’s joke!

As reported first by Floor Covering Weekly in our May 12, 2014 issue, Lumber Liquidators has three stores in New York that offer its regular assortment of wood, laminate and sundries, as well as ceramic tile, porcelain, stone and installation supplies. In one of the stores you walk in and if you turn right you are in the ceramic tile section and if you go left, it’s wood, laminate, etc.

Lumber Liquidators uses the same racking system for both. The samples face forward, generally 24" X 24", some grouted, many not. In the six-foot rack, there are three levels. They offer DIY or professional installation just like its wood and laminate offerings. Displays are neat with clean lines but they have few finished displays (except for some pictures and actual ceramic tile showroom floors) showing the true versatility and artistry of ceramic tile. They have an excellent display and merchandising section of installation supplies for ceramic tile.

Here’s the logic from our standpoint: people are buying mixed textures, not just one type of flooring for the entire house or even just the downstairs. The combinations are not laminate and wood but rather wood and ceramic tile and carpet. That’s the trifecta.

And ceramic tile is like wood in that full service flooring stores have a very low market share of total ceramic tile/stone sales in the U.S. They have a bigger market share in wood but they are not dominant in wood either; their strength continues to be in share of carpet sales.

Ceramic tile is still controlled by tile contractors. There are more than 10,000 contractors (more than 90 percent are one-person businesses); they use Home Depot, Lowe’s and ceramic tile distributors as their showroom. They go with the customer to Home Depot and select product from Home Depot merchandise. (We estimate that represents more than $1 billion in Home Depot and Lowe’s sales) Lumber Liquidators would like that action and at the same time increase the amount of wood flooring sales made with and through wood contractors.

We don’t know how the test will pan out. Wood is infinitely easier to manage, from product acquisition all the way to installation in a home. Just the complexity of SKUs in ceramic tile can be hard to manage and sell. And ceramic tile is not like wood even if some of the designs look like wood— it requires an expertise that is far removed from wood or laminate.

We are surprised that Lumber Liquidators has not jumped on the luxury vinyl tile bandwagon. The few styles of vinyl tiles are mostly peel and stick. Talk about selling the wrong end of the market. We suspect it will commit to LVT before rolling out a full ceramic tile program for all its stores.

And when will carpet be on its floors? When that happens they will be a full service flooring store, no longer a specialty store within a specialty category.